Why it's impossible to fix standard prices in hospitals in the country?

 Fixing pricing for medical and surgical treatments and procedures presents a complex challenge due to various economic, ethical, and practical factors that make it impractical and, to a large extent, impossible. Here's a step-by-step analysis of the reasons why:

 1. Variability in Costs: The cost of medical treatments and surgeries can vary widely based on the individual patient's condition, the complexity of the procedure, the hospital or clinic's location, and the specific healthcare professional's expertise. Standardizing prices would not account for these variations, potentially leading to over-payment for simpler cases or underpayment for more complex ones.

 2. Innovation and Technological Advancements: The medical field is constantly evolving with new technologies, treatments, and drugs. Fixing prices might stifle innovation by removing the financial incentives for research and development, as providers may not be compensated for the higher costs associated with cutting-edge care.

 3. Supply and Demand Dynamics: In a free market, prices naturally adjust to the balance of supply and demand. In healthcare, demand is often inelastic due to the critical nature of the service. Fixing prices could lead to shortages or surpluses of certain treatments and procedures, affecting patient access and quality of care.

 4. Quality of Care: A fixed pricing system might inadvertently create a system that prioritizes cost over quality. Providers might be tempted to cut corners to maintain profitability, which could compromise patient outcomes and lead to a two-tier system where only the wealthy can afford high-quality care.

 5. Geographic Disparities: The cost of living and the cost of providing healthcare vary significantly between different regions. A one-size-fits-all pricing system would not be sensitive to these geographic disparities, potentially leading to inadequate compensation for providers in higher cost areas or over-payment in lower cost areas.

 

6. Differences in Healthcare Systems: Each country has its unique healthcare system, with varying levels of government involvement, insurance coverage, and regulatory frameworks. A pricing structure that works in one system may not be applicable or effective in another.

 7. Transparency and Market Competition: Fixed prices could reduce transparency and competition. Without price differentiation, patients might not be able to make informed choices based on value. Competition among providers on cost and quality can drive improvements in the healthcare market.

 8. Consumer Behavior: Patients may seek unnecessary treatments if prices are fixed and perceived as "free" or overly affordable, leading to over utilization of healthcare resources and higher overall costs to the system.

 9. Rationing of Care: If prices are fixed too low, there could be a rationing of care as providers are unable to cover their costs, potentially leading to long wait times and reduced access to care, especially for non-emergency procedures.

 10. Inefficiency in Resource Allocation: Market forces help allocate resources to where they are most needed. Fixed pricing might not accurately reflect the true value of certain treatments or procedures, leading to inefficiencies in how healthcare resources are distributed.

 

11. Inflation and Cost Increases: Over time, the cost of providing healthcare tends to increase due to inflation and rising input costs (such as wages, medical supplies, and equipment). A fixed pricing system would need to be frequently updated to remain viable, which is administratively challenging.

 12. Ethical Considerations: Fixing prices could lead to ethical dilemmas. For example, if a new, highly effective but expensive treatment is developed, should patients be denied access because it exceeds the fixed price, or should the government bear the additional cost?

 13. Complexity of Medical Billing: Medical billing is highly complex with multiple stakeholders, including insurers, providers, and patients. A fixed pricing system would need to consider and incorporate these intricacies to be fair and functional.

 14. Differences in Patient Outcomes: Patients have different responses to treatments, and some may require more resources than others to achieve the same outcome. Fixed pricing does not account for these individual differences, potentially penalizing providers who treat patients with more complex conditions.

 15. Physician Autonomy: Doctors may feel limited by fixed pricing, as it could restrict their ability to tailor treatments to individual patients' needs. This could lead to dissatisfaction among healthcare providers and potentially affect the quality of care.

 

Given these factors, it's clear that implementing a fixed pricing system for medical and surgical treatments and procedures is fraught with difficulties. While the intent may be to improve accessibility and affordability of healthcare, the unintended consequences and the complexity of the healthcare market make it a challenging prospect. Instead, policymakers often focus on transparency, competition, and value-based reimbursement models to drive efficiency and cost-effectiveness in the healthcare system.

Note: The Supreme Court of India, while hearing a Public Interest Litigation (PIL) in February this year, directed the central government to find ways to regulate the rates of hospital procedures in the private sector. The trigger for the PIL and directive were the high procedure rates and their large variations.

1.BIS, which is a part of the National Standards Body of India, has initiated efforts to standardise and enhance transparency in the billing process at hospitals, has called for consultations from industry bodies and other stakeholders. A meeting has been called on 15 May on the issue. Suggestions have been sought from public representative bodies and think tanks.

2.MOH recently informed the Supreme Court that uniformity in charges for the same procedure across all hospitals was not feasible.

3.Uniform template not feasible’ : Harish Salve, senior advocate appearing for NatHealth-Healthcare Federation of India, a body comprising stakeholders in India's healthcare sector, said ,"that it was not for the courts to determine the price of medical services, and that it was the duty of the legislature. 

There is no comparison between a government hospital which receives various subsidies from the government and private hospitals, who are not beneficiaries to any such subsidies. No other service industry in India is price capped as the same is not possible.

HBI IMA EXPRESSED that it's not possible to standardize the prices. IT NEEDS SCIENTIFIC COSTING&PRICING METHODOLOGY. even then,its not possible!

By the by, To establish the price of medical services, neither the judiciary nor the legislature holds the authority or responsibility; only care providers possess that freedom &competence.